But in the gross and scope of my opinion
This bodes some strange eruption to our state.
William Shakespeare, Hamlet, 1.1
1 Finding a Place for Social Justice in the Liberty Tradition
“A due care for the relief of the poor,” said Sir Matthew Hale, the Lord Chief Justice of the King’s Bench, “is an act of great civil prudence and political wisdom,” for “where there are many very poor, the rich cannot long or safely continue such.”1 This position may have been praiseworthy in the late seventeenth century, but today it rings hollow. The liberal tradition has come a long way since it regarded the poor as a mere inconvenience for the rich, such that practices of poor relief were set to avoid a certain discomfort for the well-off rather than to help the worst-off. One exception remains, or so it is commonly believed, namely the classical liberal tradition. This tradition, for example defended by Friedrich Hayek or Milton Friedman, is generally thought to be hostile to social justice—except for private acts of charity. My objective in this book is to undo this incorrect yet far too common reading of classical liberalism. There is an egalitarian tilt to the classical liberal tradition that is unfortunately too often ignored or misunderstood. Inasmuch as one is a classical liberal, I argue, one should also be an egalitarian of a certain kind.
Not only is classical liberalism compatible with social justice, but it can also further our understanding of it. That is, a classical liberal theory can not only justify some egalitarian endeavors, and therefore be used to counter many arguments put forward by the detractors of the welfare state, but it can, moreover, make us understand why some egalitarian endeavors might very well be an essential feature of a market society. This is what I propose to explain through an approach that I term “rule egalitarianism .” If a necessary link exists between classical liberalism and the moral and institutional dimensions of the rule of law, then classical liberalism is bound to uphold a substantial form of social justice.
Coherence requires that classical liberals adopt an authentic program of social justice, by which I mean, to be precise, that they should ameliorate poverty and limit inequality not merely out of prudence or collective self-interest, but for the natural justice of ongoing social cooperation as well as for the impartiality of market institutions. This definition of social justice , focusing on questions of poverty and inequality, is not exhaustive. Social justice includes a broader concern for the distribution of benefits and burdens of social cooperation, and, as such, it also covers questions of exploitation, bargaining power, and contractual fairness.
Classical liberalism has wrongly been identified with right-wing politics, that is, broadly, as a go-to ideology for anyone inclined to criticize the welfare state. Although many classical liberals have indeed opposed the welfare state, or some aspects of it, it does not mean that the core precepts of classical liberalism themselves are irreconcilable with social justice. Quite the contrary, this book maintains. There is a need to provide a principled grounding for egalitarian policies within the classical liberal tradition, while at the same time showing how only some such policies are compatible with the main tenets of that tradition. This grounding has two dimensions—showing what is compatible and showing what is required. The rule egalitarian program will show that social justice is both compatible and required to some extent by the main classical liberal premises.
Historically, classical liberalism has been shaped by its opposition to tyranny. It is true, as James Buchanan noted, that this tradition, from its beginning onward, did not think it was the duty of the state to promote the well-being of individuals.2 In fact, such a thought was foreign to many of the early major figures of classical liberalism who were then much more preoccupied with preventing the state from tyrannizing over its people. Adam Smith and David Hume, for example, were concerned with individual freedom, not especially with social justice as we understand it today.
After hereditary tyrants had successfully been overthrown in most of Europe, and the rule of law came to be a fundamental feature of the modern state, twentieth-century classical liberals renewed the fight against tyranny, this time in the form of socialism . This fight was also won. Market capitalism had already defeated mercantilism , and central planning proved no match for the free enterprise system.
Having already overthrown tyrants, mercantilists, and communists, what was to be the next prey of the liberty tradition? This time, unfortunately, some classical liberals picked a fight they could not win. They opposed social justice, which was a mistake. The main ideas with which they defeated the enemies of the liberty tradition should have led classical liberals to embrace a program of social justice. That is, the next step for the classical liberal tradition should have been to reconcile its defense of market capitalism with a certain understanding of social justice.
Before I go on to explain why such a merger of market institutions and social justice was the natural thing to do for classical liberals after the defeat of socialism , it may be useful to get a better sense of this so-called liberty tradition, as it was called by Eric Mack and Gerald Gaus.3 Such a tradition first emerged in the pioneer writings of John Locke, and it was later developed during the Scottish Enlightenment by Smith and Hume, as well as political theorist James Mill and early sociologist Adam Ferguson. Classical economists like David Ricardo, Thomas Malthus, and Jean-Baptiste Say also shaped the economic views of such a tradition,4 and they were followed, for example, by Carl Menger, Henry Sidgwick, and Alfred Marshall. Many philosophers and political theorists, such as Jeremy Bentham, Alexander von Humboldt, Alexis de Tocqueville, and Bernard Mandeville, were likewise among the founding fathers of such a tradition.
In the twentieth century, Hayek and Friedman championed the classical liberal tradition, for instance with books such as The Constitution of Liberty or Capitalism and Freedom. James Buchanan and the Virginia school, Frank Knight and the Chicago school, as well as Ludwig von Mises and the Austrian school were likewise among the champions of that tradition. More recently, Richard Epstein gave us an enlightening look at classical liberalism in the United States with his book The Classical Liberal Constitution. The Chicago School of economics has been particularly important for the modern development of classical liberalism with, say, Jacob Viner, Henry Simons, Aaron Director, George Stigler, Gary Becker, and Ronald Coase. The Bloomington school of political economy and Elinor Ostrom were also instrumental in dissipating some common myths about planning and rational economic orders. Although each of these thinkers may not strictly endorse every tenet of classical liberalism, they are nonetheless all part of such a longstanding tradition.
What are the beliefs and commitments that unite people in this tradition? And what is the relationship between classical liberalism and the libertarianism of, say, Robert Nozick, Murray Rothbard, and Jan Narveson? Although these two liberal traditions often hold similar opinions and are regularly bundled together, they are distinct. Hayek even found the concept of libertarianism “singularly unattractive,” as he preferred to call himself a “classical liberal” or an “Old Whig.”5 There are different ways in which we can explain the distinction. One such way refers to the justificatory strategy these traditions adopt. Whereas libertarianism would be moved by a Lockean justificatory theory, classical liberalism would rather be Humean. Broadly speaking, libertarians would be committed to property rights as natural rights , whereas classical liberals would rather justify such rights by their aggregate consequences for well-being. I do not endorse such a story, especially since many classical liberals like Epstein adopt Lockean premises.6
Where classical liberals and libertarians disagree has less to do with abstract approaches to ethics, and more with substantive moral views. The distinction, I think, is about the role forced transfers play in these theories. “Taxation of earnings from labor is on a par with forced labor,”7 said Nozick, while Rothbard argued that “all relief and welfare payments should be voluntary, by private agencies, rather than by the coercive levy of government.”8 In other words, unlike classical liberals, no more than the minimal state is permissible for most libertarians. Yet, as Narveson noted, it might very well be that, in the end, libertarians justify less, that is, maybe they should favor anarchism.9 For myself, I am sympathetic to such an argument, but this book considers a different option, namely a classical liberal welfare state for which some forced transfers can be justified.
“Our property is nothing but those goods,” Hume wrote, “whose constant possession is establish’d by the laws of society; that is, by the laws of justice.”10 I will later further such a point by looking at the nature of economic rights, but, from a classical liberal standpoint, it is clear that the practice of forced transfers is a necessary feature of the state. “It is only when some individuals are forced to surrender their individual rights in exchange ...